What is PPC? Why is PPC downward sloping? Why is PPC Concave What is Opportunity Cost? What is Marginal Opportunity Cost
Every economy be it rich or poor, developed or underdeveloped faces these three Problems: (i) What to Produce? (ii) How to Produce? (iii) For Whom to Produce? Based on the above questions we will find out whether a country should Produce capital goods or consumer goods. The goods country is producing should be using labour intensive or Capital intensive techinque of production. As resources are scarce so, whether the goods should be produced for the rich or the poor? The questions to the answer is based on the kind of economies that the country operates under. Above questions to an extent can be answered with Production Possibility Curve (PPC). But before that, What is PPC? PPC also known as Transformation Curve or Transformation Line is the Cuve showing the various combination of two goods that can be produced using the scarce resources given that the resources are fully and efficiently utilized and the technique of production is constant. Graphical representation o...